Liability and Risks of Selling Your Car

liability of selling your car
When selling your car as a private seller to another individual there are things you need to know and do to keep yourself protected from liability and risks. We have already covered some of the risks that may potentially arise in our post: Know the Risks When You Sell Your Car Privately. We would like to expand on this topic and focus on things to do to avoid those risks. The following are tips you need to know when selling a car to avoid potential headaches.

Like most people, you will probably start advertising your vehicle for sale by posting online through classifieds, Craigslist, eBay, and even through social media. When it comes to factual statements, be sure your advertisement is completely accurate. For example, you should never say the vehicle has never been in an accident unless you are absolutely certain that is true. If you are not the only owner, you may need to check a vehicle history report. Even if you checked a vehicle history report when you first purchased the car, it may be a good idea to check it again as you may have forgotten some facts about your car and, often, history reports may have new information.

Once you have placed the ad, print out a copy for yourself. If the ad is completely accurate, it will protect you from outrageous claims down the road. When you start receiving call after call regarding your car for sale, remember the caveat about factual statements. You can say things like, “The car runs well!” and “This is a beautiful car!” because those are statements that are non-measurable in any really meaningful way. In other words, they are pretty much sales fluff.

your car for sale

The important thing to know that in California, as is the case in most states, sales between individuals (that is, non-dealers) are presumed to be “as is.” This means that both parties understand that the car is being sold despite its faults and the seller is not liable for any further repairs and they are relieved from any promises to make any repairs once the car is sold and title is handed over. Simply put, what you see is what you get.

Understanding that the “as is” nature of the sales protects you and gets you off the hook for repairs after the sale of your used car, it won’t, however, protect you from fraud claim. So if you make a false statement regarding your car and the buyer has the ability to prove that you made a false statement, then you may find yourself in a legal battle.

In California as well as other states, you may be held liable if you fail to disclose a material fact of the transaction to the buyer by not saying anything – remaining silent about a particular flaw the car possesses. While you didn’t lie to the buyer, you failed to tell them that the vehicle had been in an accident and the alignment was slightly off. Sure, your excuse may be, “But they never asked!” however, in some states you are responsible to disclose material facts because the “as is” condition will not protect you.

Additionally, in California, it is the responsibility of the seller to take care of the smog inspection. Make sure to smog your used car before selling it to the next owner.

Along with the aforementioned, when selling your car, make sure to transfer liability properly. If you don’t, you’ll be stuck paying for issues far after the sale is complete. Andy dues on the car that get incurred after the sale like parking tickets, registration fees, speeding tickets, abandonment, and the like would all be your responsibility. If that happens then you would find yourself in the very sticky situation of trying to prove the car is no longer yours. It’s better to take care of the transfer of liability immediately upon selling your vehicle.

Of course, while you are doing your best to keep yourself safe through honest statements and presentation, beware that someone may be trying to scam you! If a person requests to have the car shipped and are willing to pay more than you are asking if they can send you an Indonesian money order, are more than likely scamming you. Run! Do not take this offer no matter how desperate you are to sell your vehicle. There are even scams where a person will say they have a friend in the area who owes them money but will take the car and pay you the money…by way of counterfeit cashier’s check. Of course these people won’t admit they are paying you with a counterfeit check – your bank will be the one notifying you of that, and by then it will be too late – your car will be long gone. There are numerous scams and we couldn’t possibly list them all here, but be warned, obviously if someone is local you have to worry less about if they are from some place, say Kyrgyzstan or elsewhere. Remember to trust your gut and use common sense. Get cash or some form of legit payment you are comfortable with – if possible do all the transactions at the bank.

California, as do other states, requires a Bill of Sale. If you live in a state that doesn’t require one, you may feel more comfortable drawing one up anyway. Most titles contain most of the information needed for a legal sale, however, the Bill of Sale is practical additional documentation to keep things organized.

Although in California it is not already listed, to cover your back even more, in the Bill of Sale you can mention the car is being sold “as is” and then add other items of your own such as “I make no warranties,” “buyer assumes all responsibility for repairs after purchase,” and other similar statements. Although those statements are not needed, they cover your liability a little more when there is a signature on the document from the buyer. You don’t want the buyer to come back and say you made verbal promises to repair things, etc. Without this, it really is just your word against theirs.

your car for sale

Another big problem that occurs is when a buyer takes delivery of a vehicle and yet doesn’t properly transfers the title. This leaves the seller’s name on the title. Then, the buyer could get in an accident or abandon the car – all while your name (the seller) is still on the title. This doesn’t always happen, but it can and it it’s scary when it does.

You can find out how California, or your particular state handles title transfers by checking out the DMV website or the Secretary of State’s website. Follow their explicit steps and do everything precisely as recommended. We also created a guide for California car sellers on all the necessary paperwork.

When selling your used car, to protect yourself from liability, do the following:
-For all advertisements be sure the information is accurate. Print off a copy.
-Be sure both you and the buyer understand what it means when a vehicle is sold “as is.”
-Always be truthful and honest when speaking with the buyer.
-Protect yourself from scams.
-Use a Bill of Sale and use the “as is” language to further protect yourself.
-Try to get the payment in the form of cash. If not, meet the buyer at the bank to ensure the transaction is legit. Read more about safe ways to accept payments in our post: Safe Ways to Accept Payment When Selling Your Car.
-Transfer the title to the buyer properly.

On a final note, if you do not want to deal with time, effort, risks and liability of selling your car, sell it to Driveo instead! We will take your car AS IS, take car of all the paperwork and cut you a check on the spot! Learn more about many advantages of selling to Driveo.